As Nebraska's state government faces revenue shortfalls and budget constraints, the use of tax incentives for economic development may need to be examined, state senators said during the 37th Annual Commercial Real Estate Summit. 

Tax incentives were part of a panel discussion focusing on the conference's theme of "Create Solutions" and featured Omaha Senators Brad von Gillern and Tony Sorrentino, Lincoln Senator Eliot Bostar, developer Jason Lanoha and Heath Mello, chief executive of Greater Omaha Chamber. 

Return on investment is a major concern when using state revenue to fund projects, von Gillern said. The state government is constitutionally prohibited from using its credit on behalf of a project, he said. 

"If the state's going to provide money for a project, whatever it looks like, an incentive, tax credit, direct funding, whatever it happens to be, is it going to provide a greater return at a later date?" von Gillern asked. "If it does, then it piques my interest. The other thing that is of great interest is, of course, the risk." 

With legislators facing the task of addressing a budget deficit of more than $1 billion during the 2027 session, state leaders need to examine every option when it comes to providing tax incentives for projects, Bostar said. 

"I think, at least in the near term, what we need to be looking at for incentives is how do we squeeze more out of what we already have, and we've been doing some of that over the last couple of years on the revenue committee," Bostar said. "But looking at how we take existing programs, existing tax credits, and ensuring that we're getting every dollar out of every public dollar invested. I think that's extremely important for us to focus on, particularly when we are experiencing the level of fiscal constraints that we are currently." 

For Sorrentino, state involvement with developments needs to make sense. Instead of erecting new buildings, explore options of repurposing existing ones, he said. 

"We don't have to start from scratch," Sorrentino said. "I've been fortunate enough to travel to a lot of places and a lot of cities, and the successful ones seem to be using those kinds of incentives." 

Expanding existing programs to meet the economic development needs for small businesses in areas such as North and South Omaha would be more beneficial than creating new ones, he said. 

The Legislature needs to keep its agenda simple when addressing issues, Sorrentino said. "Don't try to accomplish six or seven things with one bill," he said. "It just increases the chance that six or seven times more people are going to oppose it. One, two or three things at a time."

It's likely time for each level of government in Nebraska to consider alternatives to providing incentives for economic development, said Jason Lanoha, president and CEO of Lanoha Real Estate. 

Having worked on projects in Texas, Lanoha said the state created incentives that allow flexibility for other incentives based on location and type of development, such as one for skyscrapers and another for shopping centers, Lanoha said. 

"There are a lot of different ways, but what I like about it is what it allows the folks who have boots on the ground to do is to really customize what makes sense for the project," he said. "I think we're lacking some of those tools here, where we're trying to take a couple blunt instruments and use them for every project." 

Incentive programs need to be merit-based, with rewards based on return on investment, Lanoha said. 

"If you produce what you say you're going to produce, then you should be able to use those incentives," he said. "And if you don't, you haven't produced that ROI for the public, and you should have to pay some of that back. As a developer, I know it sounds weird to say, but if our cities and our states aren't working, it's not good for anybody..." 

Von Gillern sponsored LB 1165 during the 2026 legislative session, seeking to provide incentives for companies to expand high-paying jobs. Incentives are paid after 10 years, he said. 

"(LB) 1165 creates those incentives to happen at a later date, and they basically are a pay-for-performance," von Gillern said. "That provided a huge level of comfort for my colleagues, that we're not fronting the money, we're not taking the risk on this, we're not taking a flyer on it. It absolutely has to prove itself out between all of these metrics before the state dollars are committed and are actually provided for that project." 

While he appreciates the intent of LB 1165, Lanoha said he supports the idea of tax increment financing. 

"From my side, it's harder to have a reimbursable. It's probably the right thing to do," Lanoha said. "I know TIF takes a lot of arrows, but in my opinion, TIF isn't exactly that, but it accomplishes the same thing. I could go out and get a $40 million TIF loan from the city, but if we produce $10 million, that's all we get. Is it always applied properly? I don't know."

Another possibility for public financing is the use of star bonds, Mello said. 

"(It's) essentially a concept which is using that TIF model, but utilizing locally-generated sales tax within a specific geographic space or district that goes back into supporting that development and/or some of the development's purposes." 

Star bonds meet the idea that the senators discussed concerning local flexibility in financing projects, Mello said. 

"The one dynamic, though, from the Chamber, that we've started to have more conversations about is looking beyond just sales tax-generating tenants in these kinds of developments," he said. 

While several star bond proposals around the country are driven by sales tax-producing tenants, the Chamber also prefers job-creating opportunities, Mello said. 

"Having a prime industry located there, where you're bringing in 500-600 jobs, creates a stronger incentive for the city to want to be able to see this happen, whether it's in Lincoln, Omaha or anywhere else," Mello said. "It's a whiteboard idea that we think could help generate taxes locally and generate more taxes for the state."

During the daylong conference at CHI Health Center Omaha, the CRE Summit inducted four people into its Hall of Fame: Deb Graeve-Morrison, Doug Nodgaard, Ember Grummons and Michael Moylan.

Heritage Omaha received the “Summit Award” for its design of the Omaha Central Library, which is home to the nation’s first robotic warehouse in a public library. More than 170,000 people have visited the library since its opening in April.

Nationally-renowned real estate expert Spencer Levy discussed the challenges and future of commercial real estate as the Summit’s keynote speaker.

The CRE Summit was founded by Jerry Slusky in 1990, while he taught at Creighton University. Chris Mensinger is the Summit’s co-chair, with the pair working in tandem to organize the event.

Tim Trudell is a freelance writer and online content creator. His work has appeared in Flatwater Free Press, Next Avenue, Indian Country Today, Nebraska Life, Nebraska Magazine, Council Bluffs Daily Non-Pareil and Douglas County Post Gazette, among others. He is a citizen of the Santee Dakota Nation.